NYC wants to cut back on Uber, Lyft vehicles cruising without passengers

New York(CNN Business) One year ago, New York became the first city in the United States to temporarily cap the number of ride-sharing vehicles in order to study the impact of the ride-sharing industry. Now, it is extending that cap for another 12 months.

The NYC Taxi & Limousine Commission voted unanimously on Wednesday on the extension, as well for a new rule around "cruising," which would limit the time ridehail drivers can spend roaming streets without passengers during peak hours. The idea is to cut down on under-use of drivers as well as to ease traffic.

According to the TLC's research, published in June 2019, for-hire drivers spend over 40% of their total work time driving the streets looking for passengers. Under the new rule, which is effective immediately, for-hire vehicle companies have until February 2020 to get that time down to 36% or below when driving below 96th Street during core weekday and weekend hours. By August 2020, it will need to be down to 31% or below. The companies could face fines and escalating licensing sanctions should they exceed the limits.

Regulatory changes in New York City could provide a model for other cities eager to rein in ridehailing firms that have increased congestion even as they've revolutionized transportation.

Earlier this week, City Lab reported on a new Uber and Lyft joint analysis into how their vehicles are contributing to what's referred to as "vehicle-miles-traveled." Their vehicles are responsible for "significant portions of VMT in six major urban centers" the analysis found, but their "combined share is still vastly outstripped by personal vehicles."

While New York City was not included in the analysis, it's safe to say some cities may look to New York City for leadership on how to regulate their own streets.

Unsurprisingly, Uber is opposed to the rules. In February, the company made its stance known when it sued New York City over the temporary cap on new vehicle licenses, claiming the city plans to make the cap permanent. Uber asked that the city remove the limit so it can continue adding new vehicles to the road to support demand. That suit is ongoing.

In a statement about the new vote, Uber spokesperson Harry Hartfield said: "We worry that the Mayor's rules will hurt drivers' ability to earn a living and hope that we can work with stakeholders to limit the consequences for riders and drivers."

A TLC spokesperson refuted the claims to CNN Business, noting that the new minimum pay standard adds protections for drivers and that adding more drivers to the pool dilutes earnings. Moreover, the spokesperson added that it will continue to monitor the needs of outer boroughs.

Lyft also pushed back through its spokesperson, Campbell Matthews: "There is no reason these rules needed to be rushed through on such an accelerated time frame, especially given strong opposition from members of City Council and communities across New York. We will never stop working to find better solutions for riders and drivers."